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Economic Development

Texas in Focus: Alamo Region

Economic Development

Alamo region landscapes range from ports and beaches along the flat eastern coastline to Hill Country brush and cedars in the west. Commerce in each landscape is centered on a metropolitan area, with San Antonio in the west and Victoria in the east. Traditionally, the San Antonio area has benefited from a large military presence, while the coastal area surrounding Victoria has supported manufacturing largely related to petroleum.

Today, the San Antonio economy relies on a strong health services sector that includes a University of Texas Health Science Center and a number of leading hospitals. Army medical centers and other military facilities in the area contribute to the city’s health care industry cluster as well.

Although the region’s manufacturing industry is not expected to grow significantly, the sector maintains a large economic share throughout the region, particularly in Victoria. Businesses that manufacture metals, chemicals and plastic products are concentrated near Victoria, attracted by ports and easy access to raw materials.

Construction in the Alamo region should follow state economic trends, with strong growth expected to resume as the economy recovers.

As with the rest of the state, the region’s future growth will depend less on its traditional goods-producing industries and more on service jobs, such as health care, and professional and business services.

Job growth should remain strong in the region’s non-metro counties, with positive growth in each year through 2013 despite the recent recession.

Exhibit 2

Alamo Region Employment Indices, 2003-2013

From 2003 through 2013, employment indices show significant, steady growth.  View the table for more details.

Source: Economic Modeling Specialists Inc.

View Employment Indices Table

Exhibit 3

Industry Employment Projection Indices, Alamo Region, 2003-2013

View the table for details.

Source: Economic Modeling Specialists Inc.and Texas Comptroller of Public Accounts.

View Industry Employment Indices Table

Exhibit 2 shows employment projections for the Alamo region through 2013, including San Antonio and Victoria, the region’s two metropolitan statistical areas (MSAs), as well as its eight predominately rural counties. These projections are presented in the form of growth indices relative to the base year of 2003, in which values are equal to 100 for that year.

The region has experienced job growth similar to that of the state as a whole. The Comptroller expects regional employment growth to accelerate in 2010 following slow growth in 2009. Employment in the San Antonio MSA should see a similar pattern, dropping slightly in 2009 and resuming growth in 2010. Job growth should remain strong in the region’s non-metro counties, with positive growth in each year through 2013 despite the recent recession.

Economic Trends

In 2008, Alamo region employers provided a total of 995,474 jobs. Exhibit 3 provides a detailed picture of projected employment growth in the region, displaying growth indices for various industries in the region, using 2003 as the base year. Employment for these industries is presented at the 11-industry “supersector” level of the North American Industry Classification System (NAICS).1

A supersector, as identified by a two-digit NAICS code, represents an aggregation of industries producing related goods and services. At this level, industries are classified into either goods-producing or service-producing supersectors.

The goods-producing group comprises three supersectors – natural resources and mining, construction and manufacturing. The service-producing group comprises eight supersectors including education and health; professional and business services; leisure and hospitality; finance; trade, transportation and utilities; other services; government; and information.

Nine of the 11 supersectors in Exhibit 3 should show positive growth between 2003 and 2013, with exceptional growth in education and health services. In all, Alamo region employment should rise by 23 percent over this period, despite the current national downturn.

Of the nine supersectors projected to grow by 2013, three should show steady expansion, adding jobs each year. Employment in the region’s educational and health services should lead all industries, rising by 44 percent through 2013, largely due to positive growth in home health care services. Home health care will contribute more jobs to the sector than any other industry, accounting for 20 percent of projected regional job creation by 2013. The next strongest health-related industry in terms of expected growth is physicians’ offices, accounting for 14 percent of jobs in 2013. Educational industries should see more modest growth.

Employment in the region’s educational and health services should lead all industries, rising by 44 percent from 2003 through 2013.

The region’s financial sector also should expand each year, rising from 64,870 jobs in 2003 to 77,984 jobs in 2013, a gain of 20 percent. Commercial banking will account for 30 percent of sector growth, with an expected net increase of 3,878 jobs from 2003 to 2013. With an expected 11,524 jobs, commercial banking will trail only direct property and casualty insurers in total number of financial jobs in 2013. Jobs in portfolio management should more than double over the period, rising from 950 jobs in 2003 to 2,626 jobs in 2013.

Finally, the trade, transportation and utilities sector is expected to add jobs each year, growing 19 percent by 2013, from 162,442 to 193,594 jobs. Jobs at discount department stores represent the largest expected gain, more than doubling from 2,384 jobs in 2003 to 7,668 jobs in 2013. With more than 200 establishments in the region, job growth at supermarkets and grocery stores will remain strong. The industry leads the sector in expected total employment, with 19,109 jobs by 2013.

Despite various industry downturns during the period, other sectors should show job growth through 2013. Expected growth in the professional and business services sector, at more than 39 percent, trails only that for educational and health services, even with a slowdown in 2009 from the current economic downturn.

Government leads all sectors in employment, with nearly 230,000 jobs projected by 2013, representing nearly one out of five jobs in the region. The military represents nearly 19 percent of these jobs, with an additional 8,500 jobs in the region by 2011 due to the military Base Realignment and Closure (BRAC) program.

Other regional industry sectors anticipating positive job growth during the period include leisure and hospitality (33 percent), agriculture, natural resources and mining (28 percent) and other services (14 percent).8

Economic Structure

Job growth depends upon a region’s underlying economic structure. That structure relies on multiple factors including natural resources, labor force characteristics and the composition and concentration of the region’s industries.

This latter characteristic, also called clustering, is particularly important since industry clusters give firms within them access to more suppliers and a pool of skilled laborers with valuable knowledge and information.12 The benefits that result from high industry concentrations give a region its competitive edge.13

One tool that can be used to identify industry concentration is the “location quotient.” The location quotient identifies industry concentrations by comparing the share of a region’s economy attributable to a specific industry to the share that same industry accounts for in the nation’s economy.

In essence, the share an industry accounts for in the national economy is seen as the “norm” for that industry, so comparing that norm with its share of a regional economy indicates whether that region tends to have “a lot” or “a little” of a particular industry. Typically, a region will contain “a lot” of industries for which it has some natural or developed competitive advantage, based for instance on a local abundance of a particular resource, a favorable climate, an advantageous natural feature (such as proximity to a port), a highly educated labor force or some other factor.

A location quotient greater than one indicates a high regional employment concentration in an industry compared to the same industry at the national level. This means that the region is “specialized” in that particular industry. A location quotient of less than one indicates that the region’s concentration in the industry is less than the national industry level. In essence, the region is less specialized in that given industry.

Exhibit 4 lists industries in the Alamo region with location quotients exceeding 2.0 based on 2008 employment, meaning the region’s share of employment in an industry is at least twice as large as the nation’s share. These industries are grouped according to their respective NAICS supersectors and ranked from the highest to lowest location quotient within each supersector.14

Expected growth in the professional and business services sector, at more than 39 percent, trails only that for educational and health services, even with a slowdown in 2009 from the current economic downturn.

The Alamo region has a high concentration of manufacturing, led by alumina refining. The alumina refining industry is concentrated in Victoria MSA and has a location quotient of 38.32, meaning the industry’s level of employment in the Alamo region is more than 38 times larger than the nation’s share. The next highest location quotient is in all “other information services,” which is mostly located in the San Antonio MSA and includes occupations in library services, news syndicates, and internet publishing.

Most Competitive Industries

While location quotients provide important information on regional industry concentrations, they offer only a snapshot – a static measure at a particular point in time. To assess the competitive resilience of a regional industry, a more dynamic measure is needed. One such measure is “shift-share analysis.”

In this analysis, the change in an industry’s regional presence is divided into three components: the portion attributable to the overall growth or decline in the nation’s economy (the national growth effect); that attributable to the difference between the national trend for an industry and the national trend for all industries (the industry mix effect); and that attributable to the region’s competitiveness as a site for the industry (the regional competitiveness effect).

Exhibit 5 lists the Alamo region’s most competitive industries based on shift-share analysis. The industries are ranked based on their employment change in the regional competitiveness component (and thus the industry’s comparative advantage in the region) between 2003 and 2008.

The Alamo region has a diverse list of competitive industries, with eight different industries occupying the top ten. The two highest-ranked industries are in food services. Local factors (from the competitiveness effect) contributed around 45 percent of job growth for these two industries between 2003 and 2008. The remaining growth was due to a growing national economy during the period, and the fact that industry growth was outpacing overall national growth. Industries with favorable local conditions (such as an extensive infrastructure or favorable government policies) combined with a growing national industry have the highest potential for future growth.

Exhibit 6 lists the five most competitive industries by area for the San Antonio MSA, Victoria MSA and non-metro counties.

Good Jobs for the Future

Shift-share analysis identifies the region’s most competitive industries – those that possess the best chances for increased employment opportunities. But what types of occupations can Alamo residents expect to find within these industries?

Exhibit 7 presents a list of “good jobs” for the region’s future, grouping them based on their educational requirements.

For the purpose of this analysis, a “good job” is one for which median annual earnings, as reported by the Texas Workforce Commission, exceed the state’s 2008 per capita personal income level of $38,575.17 In the Alamo region, 228 occupations pay more than this amount.

Occupations requiring both a college degree and work experience command the highest annual earnings, with weighted median earnings of $82,986 for the region. Occupations requiring a doctoral or professional degree provide the second-highest earnings, with weighted median earnings of $82,490. Occupations requiring a master’s degree ranked third, with a weighted median of $56,454.

Many occupations in the Alamo region requiring an associate degree yield higher earnings than those requiring a bachelor’s degree (without work experience). Associate degree occupations offer weighted median earnings of $54,561, while bachelor’s degree occupations offer weighted median earnings of $51,221.

It should be noted that many of the region’s occupations that meet the “good jobs” definition do not require a college degree. A number that require related work experience, on-the-job-training or postsecondary vocational training also provide good wages. Jobs requiring short-term, on-the-job training but no postsecondary education provide weighted median earnings of $49,643. Occupations requiring postsecondary vocational training provide weighted median earnings of $43,513 annually.

Exhibit 8 lists 25 occupations expected to have the highest number of job openings in the Alamo region between 2008 and 2013. Retail sales top the list, with 15,411 job openings from 2008 to 2013 and median annual earnings of $19,204.19

Ten of the 25 occupations require only short-term, on-the-job training. These provide median annual earnings ranging between $14,502 and $21,753. Three occupations require a bachelor’s degree, including elementary school teachers, property managers and chief executives. One occupation, postsecondary teaching, requires a graduate degree.

Exhibit 8

Occupations with the Most Projected Job Openings, Alamo Region, 2008-2013

Rank Description 2008 Jobs 2013 Jobs Total Job Openings Growth Replacement 2008 Median Annual Earnings
1 Retail salespersons 38,467 43,180 15,411 4,713 10,698 $19,204
2 Customer service representatives 27,570 31,122 10,919 3,552 7,367 $23,957
3 Combined food preparation and serving workers, including fast food 28,881 32,899 10,793 4,018 6,775 $15,252
4 Waiters and waitresses 19,429 21,845 10,172 2,416 7,756 $15,128
5 Personal and home care aides 15,239 19,641 10,162 4,402 5,760 $14,903
6 Cashiers, except gaming 26,827 28,440 10,079 1,613 8,466 $17,228
7 Military Occupations 36,951 42,475 8,485 5,524 2,961 $40,212
8 Real estate sales agents 14,280 17,853 8,281 3,573 4,708 $14,715
9 Real estate brokers 13,185 16,630 7,937 3,445 4,492 $14,387
10 Registered nurses 16,599 19,683 7,568 3,084 4,484 $58,823
11 Elementary school teachers, except special education 15,516 17,900 6,466 2,384 4,082 $45,413
12 Office clerks, general 19,853 22,025 6,158 2,172 3,986 $21,753
13 Postsecondary teachers 11,851 14,352 6,029 2,501 3,528 $68,452
14 Maids and housekeeping cleaners 16,521 18,708 5,906 2,187 3,719 $15,633
15 First-line supervisors/managers of retail sales workers 18,736 20,678 5,870 1,942 3,928 $28,997
16 Janitors and cleaners, except maids and housekeeping cleaners 16,877 18,843 5,527 1,966 3,561 $18,183
17 Managers, all other 13,649 15,670 5,379 2,021 3,358 $35,108
18 Property, real estate, and community association managers 9,924 12,250 5,335 2,326 3,009 $19,782
19 Child care workers 12,276 14,042 5,286 1,766 3,520 $14,502
20 Bookkeeping, accounting, and auditing clerks 15,420 17,030 4,418 1,610 2,808 $27,065
21 Home health aides 7,486 9,490 4,361 2,004 2,357 $17,292
22 Nursing aides, orderlies, and attendants 11,509 13,341 4,187 1,832 2,355 $20,553
23 Chief executives 9,312 10,741 4,119 1,429 2,690 $41,776
24 Secretaries, except legal, medical, and executive 20,795 22,021 4,095 1,226 2,869 $24,631
25 Executive secretaries and administrative assistants 12,718 14,240 4,060 1,522 2,538 $33,385

Source: Economic Modeling Specialists Inc.

Comptroller Assistance

One of the many functions of the Texas Comptroller of Public Accounts is to analyze demographics, labor force statistics and other economic factors needed to generate local economic growth, and to provide this information to local governments and other groups. Through its Texas EDGE (Economic Data for Growth and Expansion) program, the agency can identify occupational and industry trends and their effects on local and regional economies.

Since August 2008, the Comptroller has responded to 638 Texas EDGE requests from city and county government officials, economic development corporations, private businesses and members of the media. These requests have covered many topics including demographics, economic development, economic modeling and taxes.

The Comptroller also can provide local demographic data, identify business clusters and provide maps of regional roadways and waterways. For assistance, please visit Texas EDGE or e-mail

The agency also provides local governments with information about tax-related programs and helps them identify opportunities to raise funds for economic development efforts through property, sales and franchise tax revenues, exemptions and credits. The agency also provides information on special assessments and other opportunities related to disaster relief.

SECO is anticipating $290.2 million in federal funds through the American Recovery and Reinvestment Act to help local governments.

The Comptroller’s Texas Ahead Web portal and Window on State Government site provide information on tax programs and incentives, best practices and economic indicators, as well as reports and publications such as a recent report on Texas work force training, Texas Works. Texas EDGE also allows users to build customized models using region-specific data of their choosing.

Finally, the Comptroller’s State Energy Conservation Office (SECO) can help local governments slash their energy costs and adopt cost-effective clean energy technologies. SECO offers local governments a free preliminary energy audit of their facilities. These audits provide recommendations for reducing electricity consumption by improving the efficiency of heating and air conditioning systems and lighting.

SECO is anticipating $290.2 million in federal funds through the American Recovery and Reinvestment Act to help local governments save energy, create or retain jobs in the community, increase energy generation from renewable resources and reduce greenhouse gas emissions.

Industry Profiles

Caterpillar engine plant ground breaking ceremony, Seguin

PHOTO: Seguin Gazette-Enterprise


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